In the period before 2011, when the government stopped bringing Chinese construction workers to Israel in lieu of a bilateral agreement between the two countries, Chinese manpower companies – working in concert with corrupt local government officials – were suspected of coercing Chinese workers to pay large bribes to receive permission to work abroad in exchange for a permit, according to testimony quoted by the US State Department and a study conducted by five ministries – finance, economy, interior, justice and foreign affairs.

Straddled with debts of as much as $30,000 even before they began working, the Chinese workers were utterly dependent on their employer and were practically indentured servants. In response, the State Department threatened to put Israel on a blacklist of countries engaged in human trafficking since Israel knew about the Chinese corruption but continued to bring Chinese workers anyway.

Now the cabinet is repeating its old behavior. It has amended a resolution from July 2011 designed to prevent such human trafficking, exposing Israel once again to the risk of being placed on the US’s blacklist.

The resolution, which has so far protected Israel said that any decision to bring foreign workers to Israel – whether from China or elsewhere – had to be done within the framework of a bilateral agreement. Its purpose was to cut out the middleman and allow national governments to be the sole parties involved in providing permits for the movement of migrant workers. Of course, this does not guarantee that the Chinese government – or some officials inside the government – will stop receiving bribes from desperate migrant workers. But it reduces the chances.

Despite repeated attempts to reach a bilateral agreement with China, Israel has failed. And China has shown a real interest in cracking down on corruption and reaching a bilateral agreement with Israel. But the Chinese government has insisted that its local governments be allowed to charge a fee of one monthly salary for every year a Chinese worker is in Israel. So far, the sides have not been able to reach an agreement on who will pay the fee.

Further complicating the situation is the Chinese demand that its workers not be employed in Judea and Samaria. The Chinese want this stipulated in any bilateral agreement signed with Israel. Though building starts in Judea and Samaria make up just a tiny fraction of total new housing construction, the current government rightly wants to avoid signing an agreement that legitimizes a distinction between the West Bank and areas inside the Green Line before a peace agreement reached in dialogue with the Palestinians makes such as distinction.

Importing foreign workers – whether from China or elsewhere – is problematic for other reasons, as the Bank of Israel’s economists have pointed out. Relying on cheap manual labor tends to discourage technological innovation in the construction sector. Since 1967, Israel has relied on cheap labor – first from West Bank Palestinians and after the second intifada from foreigners. As a result, Israel’s construction firms are lagging behind international firms. Bank of Israel’s economists suggest opening the construction market up to foreign firms instead of importing foreign workers.

Doing so might result in a blow to the labor market, but higher levels of unemployment would hit high-salaried employees as well as menial laborers. And part of the damage would be to building contractors who are currently making large sums of money by paying low salaries to workers without investing in new technologies. International competition would force Israel’s construction firms to increase efficiency by incorporating technologies that reduce dependence on manual labor.

The dearth of local construction workers is not a new problem. But for too long now Israel has relied on workers from outside to build their homes. The time has come for a new way of thinking.

Training Israeli citizens to work in construction is one solution. But if our political leaders want to bring the Israeli construction sector up to par with international firms and stop the exploitation of cheap labor, the best solution is to open local markets up to competition.

Sites Of Interest

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